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Tuesday, January 3, 2012

11 Things I Learned in 2011: Part 2

A couple weeks ago, I wrote my first blog post reflecting on some of my learnings during my first year of entrepreneurship. After realizing how long 11 lessons were, I decided to break it up into two parts. Here's the second half of 11 Things I Learned in 2011: Part 1.

7. Maintaining your personal life pays off in your business life.
People tend to think that in order to get a company off the ground you need to be locked in your basement working 120 hours a week. While working hard (and more importantly, smart) is obviously crucial, I've quickly seen how valuable our time outside of the office has been to InstaEDU.

Beyond keeping you sane, getting out ensures that you're talking to real people. New acquaintances will inevitably ask you what you do, so every person that you meet is a chance to explain your product and gauge their reactions. I've refined our pitch hundreds of times after conversations with random people, and we completely rethought our target customers after Dan had a night at the bar with his high school friends.

I'm not saying new entrepreneurs should still attend every happy hour, but making an effort to get out when you can pays off immensely. Unless you're building a product for engineers, you should spend time with people who aren't engineers.

8. Companies = bills, bills, bills.
When we first started Cardinal Scholars, it was easy to run quick numbers that made our potential profits look like sunshine and rainbows. With only a couple hundred students working with tutors twice a week, we'd be taking in more than $600k a year in profit.

While we knew that there would be some expenses beyond paying tutors (e.g. cost of incorporation, marketing dollars), there are a lot of little costs that come with running a business that I hadn't fully taken into account. We spent thousands of dollars putting together our terms of service and privacy policy. We had to hire bookkeepers and tax accountants. We needed professional liability insurance. We now spend several thousand dollars on Adwords each month. We have the least glamorous office in the world, but rent still adds up. We've managed to build a profitable business, but we far from keep the $20-40/hour "profit" from each lesson hour.

It's also made me look at other companies in a whole new light. When I pay $20 for a pedicure, I'm trying to analyze how much of that actually lands in the salon owner's pocket. (Hint: not much.) And while I don't know their numbers, how an expense-heavy company like Zipcar will ever become profitable still perplexes me.

For anyone who's planning on bootstrapping a business for a while (something that I recommend), make sure you're planning for all the little things.

9. Before I start my next company, I'm going to travel. A lot.
I'm obsessed with traveling in general, but in the past year I started to see it as a business idea engine as well. Most American startups attempt to solve American problems because that's what they're familiar with. InstaEDU is no different, but there are a lot of other markets out there.

As I develop more of the startup mindset, I can't help but think about other business opportunities wherever I go. On our most recent trip to Central America, my boyfriend and I spent a lot of time talking about how to make it easier for small hotels to improve their online presence. (Booking a room ahead of time often took days and dozens of emails.) We had several conversations with the owner of our bed and breakfast in Belize about her pain points and the current solutions available to her. I'm not looking to start a different company any time soon, but I found the whole dialogue incredibly stimulating.

Anytime you travel, there are countless opportunities to talk to cab drivers, waiters, shopkeepers, etc. Even if you don't come up with a billion-dollar business idea, I guarantee you'll learn something.

10. My parents laid the path for me to become an entrepreneur.
I grew up in Portland, Oregon and my parents are both teachers. They're reasonably tech savvy (but my mom still uses Comcast email). At first glance, they don't seem like the type that would raise two Internet entrepreneurs, but the more I think about it, the more it makes sense.

Whenever I read articles about why there aren't more female entrepreneurs, I have difficulty relating. A lot of the arguments have to do with the fact that passive people don't make great entrepreneurs (and women tend to be more passive than men).

Fortunately, my parents raised us to both think big and be assertive. Nothing was out of the question if we could argue for it well enough. I quickly learned to pick my battles and then fight them relentlessly. (My mom's patience with us over the years amazes me to this day.) We weren't going to get yearly spring break trips to Hawaii, but I could convince my mom to let me wear makeup sooner. Near the end of elementary school, I vividly remember writing my mom a persuasive essay on why I should be allowed to shave my legs. After a few more discussions, permission was granted.

While my fondness for arguing can sometimes drive my friends crazy, I've had 24 years of training in figuring out what I want, what's possible to get, and how I can get it. And I certainly think that helps in business.

11. I undervalued Twitter and blogging.
Sorry, I'm late to the game with this one.

I've always considered myself someone who "gets" social media. I think I did a solid job at managing our Facebook and Twitter presence at Aardvark. When I worked at Google, I ran their Facebook page for a while and taught several product teams how to implement social media. But what I failed to do for a long time was use anything other than Facebook for personal development.

I reinvigorated my personal Twitter account recently when I wanted to learn more about various investors. While it's helped with that a little bit, the conversations it's started have been much more powerful. I've reconnected with a number of startup acquaintances and seen a bunch of interesting entrepreneur resources that I would have missed. (My Facebook newsfeed is full of party photos and people who are upset about the outcome of the Fiesta Bowl.)

When I wrote my first blog post a couple weeks ago, I mainly wanted to force myself to reflect on the past year. I posted the link to my Facebook and Twitter, expecting a couple dozen clicks from my boyfriend, dad, etc. Instead, a few people actually retweeted it, and after getting sent out in a Startup Digest reading list, it's had more that 2800 pageviews. More significantly, I've received several dozen comments, tweets and emails from interesting people I'd never spoken to before.

While nothing that I've written is groundbreaking, it's helped me realize that there are a lot of people who are in the same place and want to connect with each other. Myself included. Tweeting, blogging, etc. helps me find those people.

So find me on Twitter at @ajalison :)

4 comments:

  1. I am reading this while I am having a break from a 4-hours coding session.
    This is exactly what I have on my to-do list for my own educational software small business (PascalOasis).
    It's good to know there are others out there going through the same process.
    Good luck with InstaEDU, I will be watching you closely.

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  2. Thanks for your support :) Best of luck to you as well!

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  3. This comment has been removed by the author.

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  4. I took my time to read Part 1 and Part 2, thank you for sharing your experience, you enriched me.
    InstaEDU launchpage is mesmerizing :)

    Angelo Milanetti

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